It’s easy to feel overwhelmed during times of economic uncertainty. Preparing your project management office for related challenges will alleviate the stress on your business. In this blog, we share five important steps to take to prepare.
In 2023, companies face a great deal of uncertainty as they brace for a continued economic downturn and the unpredictability of rising inflation, banking system failures, higher interest rates and an unstable job market. In these challenging times, the role of the project management office (PMO) is more important than ever.
As a valued strategic partner, the PMO should recognize its stakeholders need help dealing with these increased business risks – how ready is your PMO to take on these challenges? Let’s explore five areas of preparation.
PMO Readiness: Dealing with Economic Uncertainty
During unstable times, most organizations focus on reducing or mitigating risks until the economic uncertainty passes. Organizations tend to become inherently more cautious, which requires the business to change or shift priorities as they prepare to weather potential fallout from economic instability.
Frequently, organizations may need to make some short-term adjustments as they attempt to manage the risks associated with so many unknowns. This is a time for the PMO to lean in and help guide the business as it implements plans and strategies to mitigate these risks.
Organizations are likely to take unprecedented actions to realign priorities and areas of strategic focus, including:
- Reprioritizing non-discretionary projects
- Canceling or deferring projects
- Reducing project scope or realigning project goals
- Pausing or delaying full-time hiring activities
- Hiring contract staff instead to meet resource demands.
In all cases, organizations need leadership and partnership from their PMO to assist in managing these activities. Doing more with less will be key, so the PMO needs to be ready with strong governance around portfolio management, value management and project execution. In addition, ensuring performance metrics and analytics are in place to enable and inform strategic decision making will also be extremely important.
Let’s take a look at how your project management office can prepare. We’ll also share five questions to ask to confirm you are ready.
1. Be Ready to Inform Decision-Making
It is challenging for the business to determine which projects to stop or pause in the face of uncertainty. A PMO’s strength is in leading the business through these difficult decisions, which typically involves formulating complex what-if scenarios to assess financial as well as customer and employee impacts.
When the PMO is ready with processes, tools and data to inform and enable this detailed analysis, the organization is better equipped to make timely strategic decisions, including whether to reprioritize, cancel or defer projects across the portfolio.
Ask yourself: Does my PMO have the capability to deliver complex what-if scenarios to support replanning efforts?
2. Be Ready to Manage Value End-to-End
As project resource levels fluctuate, it is increasingly important for the PMO to demonstrate a consistent approach to value delivery to ensure you realize maximum benefit from those resources.
Value realization becomes a predictable outcome when the PMO effectively manages value end-to-end, including checks throughout the process to enable effective decision making regarding scope and project viability. The PMO must also bring transparency to better manage risks brought about by economic uncertainty, which could impede the realization of value upon project delivery.
Ask yourself: Can my PMO manage value across your project portfolio to ensure you continue achieving the most valuable business outcomes?
3. Be Ready to Cancel or Defer Projects
A frequently overlooked function within a PMO is the ability to effectively cancel or defer projects. Typically, many organizations do most of their planning and prioritizing up front and once teams approve a project, it moves forward.
Although there may be some checks or stage gates along the way, projects are generally not stopped midstream. However, during economic uncertainty, the business may need to quickly shut down or temporarily defer specific projects.
It sounds easy, but halting an exceptionally large and complex project or program may be quite challenging. There are many aspects to consider, including closing out financial reporting, dealing with vendor contracts, redeploying staff, retaining project knowledge as well as supporting customer and employee communications.
Ask yourself: Is my PMO ready to manage an effective project closure, or are you likely to approach project cancellations ad hoc?
4. Be Ready to Manage Scope
In times of risk, organizations often scrutinize budgets and manage expenses more tightly. As a result, PMOS need to have the skills necessary to help the business manage scope effectively.
To address the uncertainty in the economy, business leaders may want to deliver projects iteratively or in smaller phases. If your PMO typically manages waterfall projects, this may require a significant shift in project approach. Delivering only what is necessary, or the minimal viable product (MVP), relies on strong project leaders with training and experience in agile techniques and methodologies.
Ask yourself: Is my PMO ready to support the business with the agility needed to ensure the business only deploys dollars and resources to the most critical projects?
5. Be Ready to Onboard Temporary Staff
Organizations are highly likely to slow or reduce full-time hiring during economic uncertainty. Companies may often hire consultants and contract staff to fill temporary resource gaps. It is extremely important to assimilate consultants into projects as quickly as possible to reduce project downtime and lessen the impact on existing resources.
PMOs should be ready with a full onboarding solution providing the information, tools and processes necessary to allow these new resources to quickly contribute value to the organization. In addition, the project management office must focus on knowledge management to ensure it retains critical project knowledge when temporary staff leaves the organization.
Ask yourself: Is my PMO ready to onboard temporary staff in a timely manner?
There is too much at stake for your PMO not to be ready. Every day you don’t fix your business problems, your business loses revenue. Now is the time for your PMO to be proactive. The most innovative PMOs enable effective decision-making and help achieve valuable business outcomes through strategic alignment and delivery excellence.